Editor’s Note: In this latest account about the challenges faced by SMEs in terms of doing business with the UK Government – a challenge that is more often than not commensurate with King Arthur extracting the sword from the Stone of Scone – Alun Rafique shares, in both words and pictures, his company’s experience with providing evidence before the Communities and Local Government Committee.

For those who weren’t aware, we received a grant from the technology Strategy Board to help develop our tool to assist local councils with adoption of eSourcing and encouraging innovation from local suppliers. We took our innovative design and applied it to the areas of sub-OJEU tenders and in-framework negotiation.

We have had much success in helping councils to easily and efficiently save money. However, we have also faced many challenges working with the Public Sector, mainly relating to the inconsistency of tendering approaches and onerous procedures.

We thought it wise to engage with the Government and submit a paper to the Communities and Local Government Committee investigating local government procurement. From many papers we were chosen to submit oral evidence at a meeting on the 25th of September 2013. We had a unique view as an SME trying to supply Local Government and also as a supplier of systems that they also use for procurement. You can see the written paper we submitted here.

And this is how we took our first foray into politics. It was also our first trip to Westminster Palace. To be honest we felt very honoured to give evidence. It is awe-inspiring to be looking at Westminster and knowing that we had a pass inside, an A4 printout saying “Visitor on Committee business”. We must admit that the feeling of self-importance partially evaporated when we realised that any member of the public can just go in and watch the action. We couldn’t help wonder why so few people did but it was just as well considering the size of the cafe.

The walk to the room where the meeting was being held allowed us to pass through the essence of UK politics. Through the cafe (whilst casually passing Lawrence Dallaglio), into Westminster Hall(almost 1000 years old and a witness of many events from coronation banquets to the trial of Guy Fawkes), through St Stephens Hall (a former debating chamber for the House of Commons) and then deciding to take a well earned rest in the Central Lobby which is the heart of the Palace of Westminster.

It was a great work up to the main event. To imagine three years ago we were just starting out and looking back we seem to have come so far. I guess for many the trip into Westminster is a daily occurrence but it was nice for us to get our foot in the door.

The next stop was the Committee meeting itself. At first we were apprehensive on what to expect. We were asked if we saw the committee with Rupert Murdoch and told it would be quite similar. This brought up memories – would someone throw a foam pieat us? Then we were told probably half the committee members would not be able turn up due to other engagements which put us more at ease. In fact the reality was part way between the two. On the day we had a full house with all the committee members (we would like to think that was down to us!). What surprised us was the professionalism of the organisation and the facilities. You can see from the photos that the layout was as you would see in the news. The room was beautiful with large ornate paintings on the wall, walnut panelling and also someone ensuring that it was all filmed for posterity.

This was the fifth session and it was split into two parts. The first was on delivering social value and the second, our session, was on supporting small and micro businesses. Our fellow panel members were Martin McTague, Chairman, Local Government Policy Unit, Federation of Small Businesses and Dr Pedro Telles, University of Bangor.

Our debate seemed very lively and you can actually watch ithere.The committee covered a good variety of topics and we will summarise the main ones below highlighting our replies which for the most part were echoed by our fellow panelists:

1. Challenges of SMEs competing for local Government business – The views here between the panellists were very similar with respect to local government procurement procedures being varied and inconsistent. We also highlighted that localism for localism’s sake is not enough and local councils need to examine bringing supply chains into the UK from abroad.

2. Issues with collaboration and frameworks – We all highlighted the potential pitfalls in aggregating requirements but eliminating the ability for an SME to tender. There are also too many portals and frameworks out there for the same capabilities which takes up much time and resource.

3. Local Government procurement skillsets – A mixed response here although it seems that good skills exist already and more guidance is required.

4. Would centralising help – Again a mixed view. It would seem beneficial from a leadership perspective but there is a caveat to ensure that the right measurable objectives are put in place.

5. Are the onerous procedures a result of Local authorities or EU regulations – We strongly feel it is a mixture of the LA’s interpretation of OJEU rules for sub-OJEU tenders.

Our overall view is that Local Government procurement need to take a more consistent and less onerous approach. The processes followed should be appropriate to the size of the tenders. Linear and logical scoring mechanisms should be used and Local Authorities should try harder to take account of innovation. Also regional centers of excellence could help with guidance, support, aggregation of requirements and reducing supplier risks as well as helping bring supply chains back to the UK.

We felt very pleased to have had the chance to voice our successes and concerns with Local Government procurement and we hope that our support to this committee will only go to strengthen the conclusions that will come out. It was an enjoyable day and we would like to thank all concerned. We must admit that one of the biggest surprises of the day came at the end when we realised we had already been beaten to the punch on twitter by the Government. They are really getting on top of social media at last.

Wednesday, 4 December 2013

The following article featured as a guest post on the excellent Procurement Insights EU blog. It outlines some of the challenges we have faced whilst working with local government, for which we were invited into Parliament to discuss with MPs - more to come on that later!

Life remains tough for small, innovative companies trying to secure UK public sector business by Alun Rafique

“In order to give Customers using the Framework a balance between
choice of suppliers and best value, following completion of the
evaluation of tenders a maximum number of five suppliers will be awarded
a position on the Framework. It is therefore vital that Tenderers can
offer each of the five modules detailed on the following page. As
referenced previously in this ITT it is anticipated Customers will elect
to procure one or more modules or may choose to purchase a complete
solution incorporating all of the five modules. It is therefore
essential that Tenderers can offer all of the five modules to meet the
requirements of those customers looking for a complete solution. Any
Tenderer who cannot offer one or more of the elements listed above in
3.1 will be removed from this procurement process.”

The above is a quote from an invitation to tender by the UK public
buying organisation (PBO), Eastern Shires Purchasing Organisation.

The modules, which represent a complete e-procurement solution, are
e-tendering, e-evaluation, e-auctions, e-contract management, and
e-vendor management. As stipulated, Tenderers have to offer all
5 modules or face being disqualified as a potential supplier.
Unfortunately, it is this “all or nothing” approach that represents just
one of the many obstacles that Small- Medium Enterprises or SMEs face
in the pursuit of public sector business.

More to the point, the stipulation that Tenderers have to deliver all
5 modules, will eliminate or seriously impede the ability for the
majority of SMEs to participate regardless of the superior capabilities
of the modules they are able to provide. While I believe that this is
an unintended consequence of a short-sighted approach, it nonetheless
amounts to what could only be viewed as a discriminatory practice that
will limit the pool of potential suppliers to the detriment of all
involved – including the government itself.

Despite the government’s attempt to introduce reforms that would
address the above challenge, the task for SMEs remains a difficult one.

In this context, I would like to take a moment to share with you the experience of my company, Market Dojo.

Market Dojo successfully applied for a grant from the Technology
Strategy Board to develop a product to assist public procurement
professionals with e-Sourcing activities.

While this support was greatly appreciated, once fulfilled we were
for all intents and purposes on our own from that point onward. In
essence and despite the government’s recognition that MarketDojo’s
negotiating tool for running e-auctions and electronic request for
quotations warranted financial support as it addressed “a particular
problem area where frameworks have traditionally underperformed,” the
method for actually utilizing our solution is hindered by the above
mentioned all or nothing edict.

Simply put, and has demonstrated by the government grant, we believe
that our product – and the complimentary products of other SMEs – can
collectively save organisations a lot of money.

Even though we have made some progress in the public sector, having
landed three government contracts, the private sector still represents
the company’s best and most reliable opportunity for continued growth
and long-term success. This leads one to wonder why SMEs are worthy of
government funding but not considered to be worthy partners?

There are of course financial consequences associated with this disconnect.

For example, while both the transport team at Bedford Borough Council
and Shropshire County Council have benefited greatly from their
relationship with MarketDojo, Worcester County Council’s adoption of a
more traditional contracting strategy meant that they ended up paying
£2750 per e-auction, instead of the £500 for five that Market Dojo would
have provided. This difference amounts to Worcester paying 27 times
the price that neighbouring Shropshire County Council is paying per
e-auction.

A further complication in terms of government achieving a best value
outcome is the tendency on the part of local councils to interpret
European Union tendering regulations differently from one another. Some interpretations as I have discovered, can lead to councils paying
far too much for a less effective solution as a result of inflexible
scoring mechanisms for evaluating tenders. In one instance it was
suggested that if we redesigned our system to better mirror the
specifications of the tender, we would have a better opportunity of
winning the contract. Unfortunately, such an alteration would in
reality eliminate the very functionality that led to the significant
savings that were realized by both Bedford and Shropshire Councils.
This again makes one wonder what it is that the government is attempting
to accomplish, as there seems to be a greater emphasis placed upon
following arbitrary regulations as opposed to driving greater value from
procurement.

Needless to say, the combined outcome of all that I have covered
above has led to a common complaint that far too many public sector
procurement people hide behind rigid processes and procedures. This in
my estimation, prevents public sector bodies from realizing maximum
value for money in that they ultimately discriminate against SMEs and
the innovative solutions they can provide.